SOMANYCERA.NS WACC - Weighted Average Cost of Capital

The WACC of Somany Ceramics Ltd (SOMANYCERA.NS) is 15.6%.

The Cost of Equity of Somany Ceramics Ltd (SOMANYCERA.NS) is 17.50%.

The Cost of Debt of Somany Ceramics Ltd (SOMANYCERA.NS) is 8.30%.

	Range	Selected
Cost of equity	15.80% - 19.20%	17.50%
Tax rate	27.50% - 28.90%	28.20%
Cost of debt	7.50% - 9.10%	8.30%
WACC	14.2% - 17.1%	15.6%

WACC

SOMANYCERA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.08	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.80%	19.20%

Tax rate	27.50%	28.90%
Debt/Equity ratio	0.19	0.19
Cost of debt	7.50%	9.10%

After-tax WACC	14.2%	17.1%


Selected WACC	15.6%

SOMANYCERA.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for SOMANYCERA.NS:

cost_of_equity (17.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.08) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.